SUCCESS FACTORS OF A LEADING MEETING INDUSTRY DESTINATION

SUCCESS FACTORS OF A LEADING MEETING INDUSTRY DESTINATION with a special focus on Vienna 2. BACHELOR S PAPER submitted at the IMC University of Applied Sciences Krems Bachelor s Programme Tourism and Leisure Management by Natalie SCHÜTTER Area of emphasis: Meeting Industry Management Advisor: Dir. Hans Mixner Submitted on: 21.05.2010

STATUTORY DECLARATION I declare in lieu of an oath that I have written this bachelor thesis myself and that I have not used any sources or resources other than stated for its preparation. I further declare that I have clearly indicated all direct and indirect quotations. This bachelor thesis has not been submitted elsewhere for examination purposes. Date Signature May 21, 2010 Natalie Schütter

TABLE OF CONTENTS STATUTORY DECLARATION... 1 LIST OF FIGURES AND TABLES... 6 LIST OF ABBREVIATIONS... 7 ABSTRACT... 8 1 INTRODUCTION... 9 1.1. Problem Statement... 9 1.2. Research Question and Research Aim... 10 1.3. Research Method... 10 1.4. Chapter Outline... 11 2 DEFINITION... 12 2.1. Business Tourism... 12 2.2. Meeting Industry... 14 2.2.1. Terminology... 14 2.2.2. History and Development... 14 2.2.3. Structure of the Meeting Industry... 15 2.2.1.1. Buyers... 16 2.2.1.2. Suppliers... 19 2.2.1.3. Agencies and Intermediaries... 21 2.2.1.4. Destination Marketing Organizations... 23 2.3. Rankings... 24 3 THE MEETING INDUSTRY IN VIENNA... 26 3.1. Historical Background... 26 3.2. Vienna Meeting Industry Statistics... 27 3.3. Vienna s Offer to the Meeting Industry... 30 3.3.1. Accessibility... 30 3.3.2. Venues... 31 3.3.2.1. Convention Centers... 31 3.3.2.2. Academic Venues... 33 Natalie Schütter 3

3.3.2.3. Palais & Museums... 33 3.3.2.4. Unusual Venues... 33 3.3.2.5. Conference Hotels and Hotels for Small Meetings... 33 3.3.3. Cultural Offer... 34 3.3.4. Gastronomy... 35 3.4. Vienna s Demand... 35 3.4.1. Markets... 35 3.4.2. Seasonal Demand for Meetings... 36 3.5. Vienna s Marketing as a Meeting Industry Destination... 36 3.5.1. Vienna Tourism Board... 37 3.5.2. Vienna Convention Bureau... 37 3.5.3. Austrian Convention Bureau... 38 3.5.4. Austrian National Tourist Board... 38 3.5.5. PCOs, DMCs and Related Services... 39 4 EMPIRICAL RESEARCH... 40 4.1. Description of the Method... 40 4.1.1. Research Design... 40 4.1.2. Expert interviews... 40 4.1.3. Questionnaire... 41 4.2. Description of the Results... 42 4.2.1. General Success Factors of a Meeting Industry Destination... 42 4.2.1.1. Accessibility... 42 4.2.1.2. Infrastructure... 42 4.2.1.3. Image building and branding... 43 4.2.1.4. Marketing activities... 44 4.2.1.5. Networking... 44 4.2.1.6. Cultural offer... 44 4.2.1.7. Stability, security & quality of living... 45 4.2.1.8. Understanding association patterns... 45 Natalie Schütter 4

4.2.1.9. Corporate Headquarters... 46 4.2.2. Vienna s Success Factors as a Meeting Industry Destination... 46 4.2.2.1. The Vienna Convention Bureau... 46 4.2.2.2. Partnerships... 47 4.2.2.3. Infrastructure & accessibility... 47 4.2.2.4. Vienna s image... 48 4.2.2.5. Ambassadors... 49 4.2.2.6. Medical Sector... 50 4.2.2.7. Governmental support... 50 4.2.2.8. Cultural offer... 51 4.2.2.9. International organisations... 51 5 CONCLUSION... 52 LIST OF REFERENCES... 55 APPENDIX... 59 Natalie Schütter 5

LIST OF FIGURES AND TABLES Figure 1 Business travel sectors... 13 Figure 2 Vienna s international ranking... 28 Figure 3 Congresses and Corporate Events 2008... 29 Figure 4 International congresses detailed analysis by subjects... 30 Figure 5 International congresses detailed analysis by venues... 31 Table 1 International congresses detailed analysis by monthly distribution... 36 Table 2 International congresses detailed analysis using specialized congress agencies... 39 Natalie Schütter 6

LIST OF ABBREVIATIONS ABCN ACB ACV CAT CRM CVB DMC DMO IAEA IAEM IAPCO ICCA IGO MPI NGO OPEC PCMA PCO UIA VCB Austrian Business and Convention Network Austrian Convention Bureau Austria Center Vienna City Airport Train Customer Relationship Management Convention and Visitor Bureau Destination Management Company Destination Management Organization International Atomic Energy Agency International Association of Exhibition Management International Association of Professional Congress Organizers International Intergovernmental Organization Meeting Professional International Non-governmental Organization Organisation of Petroleum Exporting Countries Professional Convention Management Association Professional Conference Organizer Union of International Associations Vienna Convention Bureau Natalie Schütter 7

ABSTRACT The meeting industry market is increasing rapidly as new meeting industry destinations appear globally. Therefore, competition is increasing and many destinations need to improve their services for the meeting industry in order to stay competitive in the market. There are a few destinations that have had incredible development within the industry and became very successful as a meeting industry destination. This paper investigates the success factors of a leading meeting industry destination and a special focus has been put on a destination that has been very successful within the meeting industry, Vienna. Vienna is a city rich with cultural offers and meeting facilities. However, this is not the only success factor of the city. In Europe, there are many other cities that can offer similar buildings and cultural offers and yet Vienna has been successful for quite some time and has therefore been carefully analysed. A literature review helped to identify the structure of the meeting industry, the important players within the industry and some terms that are used to describe the meeting industry. A great emphasis has been placed on expert interviews which were conducted with important and experienced personalities within Vienna s meeting industry. With the knowledge and experience of those experts, a range of general success factors that a destination, which seriously wants to compete on the meeting industry market, needs to have were identified. Since almost all experts have been working in Vienna s meeting industry for quite some time, they demonstrated extensive knowledge about this industry and its developments during the last years. This helped to understand how Vienna was able to become so successful as a leading meeting industry destination. The findings of the research, the so called success factors of a leading meeting industry destination, can be a great help for many destinations who seek to improve their offer to the meeting industry and who want to create a competitive advantage for their destination. Natalie Schütter 8

1 INTRODUCTION 1.1. Problem Statement The meeting industry is a rather young and vibrant industry which is growing at a fast speed on a global basis (Rogers, 2008, p. 1). Many destinations invest heavily in meeting facilities, infrastructure and service offers because they have realized that the economic impact of this industry can be extremely beneficial to the local economy (Rogers, 2008, p. 80). The competition therefore grows rapidly as well and new meeting industry destinations emerging, wanting to compete on the global market. This can especially be witnessed when considering rankings for leading meeting industry destinations by various associations within the meeting industry (Davidson & Rogers, 2008, p. 32). For many years [now], Vienna has been ranked among the top cities for business tourism, in particular for the number of conferences and other types of meetings held there. (Davidson & Cope, 2003, p. 145) The meeting industry has quite an importance for Vienna s economy (Davdison & Cope, 2003, p. 145). Vienna is one of the world s foremost international conference cities, boasting three convention centers, 131 event locations, and over [..] [400] hotels, all of which are interconnected by an excellent public transport network. (Vienna Convention Bureau, 2007, p. 7) ICCA (International Congress and Convention Association) ranked Vienna as the number one destination in the industry, equal to Paris, with the most meetings held in a city worldwide. For the first time in three years, Vienna shares the top with Paris as the most popular city in 2008. (ICCA, 2009a, p. 15) Vienna s meeting industry s development has been quiet spectacular since 2003. Between 2002 and 2008 the number of national and international congresses rose from about 400 to more than 700 congresses while corporate events had an increase from 1,000 to 2,500 events (Vienna Tourist Board, 2009, p. 11). In 2008, Vienna hosted a total of 3,257 congresses and corporate events, which generated a total of 1,261,494 overnight stays and EUR 654.39 million in induced gross domestic product. (Vienna Convention Bureau, 2008a, p. 10) The Vienna Convention Bureau already suggest several reasons why the city is so attractive to host conferences, meetings, and conventions, such as the tradition, the standard of living, and Austrian s rather dependable economy. There are no restrictions to enter Austria and Vienna s airport is easily accessible with almost 18 Natalie Schütter 9

million passengers arriving each year as well as, being a great gateway to the east (Vienna Convention Bureau, 2010g, para. 3-12). 1.2. Research Question and Research Aim The research aim of this bachelor thesis is to identify general success factors of a leading meeting industry destination as well as the factors that make Vienna so successful in the meeting industry on a global level. The research question What are the success factors of a leading meeting industry destination? allows the further examination of the top meeting destination, Vienna, in more detail. Once the general success factors have been identified, the research question What are Vienna s success factors as a leading meeting industry destination? can be identified and explored in more detail. Sub-questions created to find out about Vienna s success factors will include questions regarding Vienna s image as a meeting industry destination, Vienna s USP that makes the city attractive to host so many meetings and events, as well as Vienna s offer to this industry. The identified success factors will be able to support the reader in understanding which factors are essential for a destination in order to compete on a global meeting industry market. A destination can then use those factors to improve the destination s demand for meetings and become successful. 1.3. Research Method In order to answer the research questions several research methods have been used. Qualitative research has mainly been conducted throughout the process of producing this bachelor thesis. Secondary data has been collected through the literature review which was necessary in order to create a basis of knowledge of the subject under investigation and refers to data that already exists. This means that data was collected for some other (primary) purpose but which can be used a second time in the current project. (Veal, 2006, p. 147) Secondary literature sources such as journals, books, newspapers, websites, and statistical reports have been used for this research paper. Quantitative data research has not been conducted but analysed during the process of the literature review. An important focus has been placed on collecting primary data using the qualitative approach of expert interviews. An interview can be defined as a faceto-face verbal interchange in which one person, the interviewer, attempts to elicit Natalie Schütter 10

information or expressions of opinion or belief from another person. (Dunk, 2005, p. 79 cited following Maccoby and Maccoby, 1954, p. 499) Experts of different fields within the industry were asked about general, and particularity about Vienna s success factors as a leading meeting industry destination. These included experts from conference centers, destination management companies, professional conference organizers, meeting planners, destination marketing institutions and hotel chain representatives. 1.4. Chapter Outline The first chapter provides important background information and the main idea behind the thesis, including the problem statement, the research aim and the research questions. Chapter two describes vital terminology and will explain the main concept of the meeting industry, how it works, how it is structured, and who is involved as well as a brief historical background of the industry. The third chapter is dedicated to Vienna s meeting industry. First, a historical background is provided followed by some key statistics and Vienna s offer to the meeting industry as well as its demand in terms of markets and seasons. Additionally, institutions which are the key players for Vienna s marketing activities as a meeting industry destination will be presented and a special focus is placed on the Vienna Convention Bureau. The fourth chapter presents the empirical research method that has been used in order to answer the research questions. A detailed description of the research method including the research design, the description of the expert interviews, and the main topics asked in the questionnaire are provided in this chapter. The most important part of this chapter is the description of the research results. First, general success factors of a leading meeting industry destination are presented followed by a presentation of specific success factors on the example of Vienna. The chapter concludes with an overview of the important aspects and results of the findings and will summarise the most important success factors of a leading meeting industry destination. Natalie Schütter 11

2 DEFINITION The first part of this study deals with definitions and explanations of the terminology used in this thesis. This gives the reader insight into the field of study and explains all the necessary terms used in this research paper. It is vital to first define the term business tourism before discussing the concept of the meeting industry. In order to understand the concept of the meeting industry it is important to know where this industry belongs, what it entails, and how it has been used in this research paper. Once the principals of business tourism and a general introduction to the meeting Industry has been given, the history and the structure of this particular industry can be explained. This presents a first insight into the industry, how it is structured, who is involved, and how the industry functions. 2.1. Business Tourism Davidson and Cope (2003, p. 2) suggest two main motivations for people to travel: business and pleasure. However, travelling for the purposes of trading in distant markets and attending meetings to discuss issues of common concern, was already widespread many centuries before the rise of pleasure travel. Therefore, the earliest motivation for travelling was already the need to meet and negotiate face to face with others. Today s business travel includes all trips whose purpose is linked with the traveller s employment or business interest. (Davidson & Cope, 2003, p. 3) This can mean that business travellers go on trips in order to carry out a specific task, to help them learn about how to carry out work more effectively, or to get rewarded by the employer when having done an outstanding job (Davidson & Cope, 2003, p. 3). Davidson and Cope (2003, pp. 3-4) have defined business tourism as a part of the umbrella term business travel and divide business travel into two main forms: individual business travel and business tourism. Lawson (1982, p. 298) also referrers to these as individual travel and organized group arrangements. However, Davidson and Cope have created an easy to understand graph (Figure 1 Business travel sectors) showing the structure of the business travel industry. Natalie Schütter 12

Figure 1 Business travel sectors Source: Davidson & Cope, 2003, p. 4 Individual business travel includes those trips that are undertaken by individuals to perform their job. This typically takes place regularly and is a necessity of the particular job. The destination is usually not chosen but rather demanded depending on the work to be done. Wherever the client, the problem to be solved, or the contract to be signed, is based, the traveller has to go to the predetermined destination. This can be referred to as the nondiscretionary business travel sector (Davidson & Cope, 2003, p. 4). Business tourism can be referred to as the discretionary sector, where a certain degree of flexibility in the decision-making process of where to meet can be found. Group meetings such as seminars, conferences or product launches, incentive trips, exhibitions such as trade fairs, trade shows, consumer shows, and corporate hospitality events are also included in this sector, which often means travelling in a group and is an occasional feature of employment (Davidson & Cope, 2003, p. 4). However, it has to be mentioned that there are several forms within the business travel industry that only require little travel and are not related to any business. Very often, association conferences do not have anything to do with a profession, where the motivation to meet is not to discuss issues related to the delegates jobs or professions rather than to meet because the association members share an interest in voluntary or charity work [...], the same faith [...] or the same hobby (Davidson & Cope, 2003, p. 5). Natalie Schütter 13

2.2. Meeting Industry 2.2.1. Terminology The meeting industry is a very large and diverse part of business travel. Davidson and Cope (2003, p. 70) mention that it is our natural predisposition to congregate regularly in order to exchange our ideas and experiences, enhance our knowledge and skills, and celebrate our most laudable achievements. Exchanging and distributing information is a typical feature of the professional, political, spiritual and recreational lives of a significant proportion of the population. However, the terminology meeting industry can be rather difficult to define, since there are many different interpretations available. Very often the acronym MICE (for meetings, incentives, conferences, and exhibitions or events) is implemented (Rogers, 2003, p. 15). Therefore, Davidson and Cope s (2003, p. 4) interpretation of business tourism will be referred to as the meeting industry including all kinds of group meetings, incentives, exhibitions and corporate events. 2.2.2. History and Development As previously mentioned, people met and gathered in the early days of civilization in order to trade and for commerce. However, only during the last 50 years has the meeting industry reached an enormous scale, not only because of the expansion of globalization and easy accessibility, but also due to the need for better communication processes. The term meeting industry is fairly new in its use, and not many people would have used this term in the 1950s (Davidson & Cope, 2003, pp. 70-71; Rogers, 2003, p. 2). One of the most well known high profile events, which some refer to as the launch event for today s meeting industry, was the Congress of Vienna held from September 1814 until June 1815. This congress was organized to re-establish the territorial divisions of Europe after the end of the Napoleonic Wars. With representatives from all major world powers at that time such as Alexander I, Emperor of Russia, Prince Karl August von Hardenberg of Prussia, or the Duke of Wellington, one can imagine their expenses and the beneficial economic effect on Vienna the congress had at the time (Davidson & Cope, 2003, p. 71; Rogers, 2003). During the 19 th century, universities started to make their facilities available for exchanging information within academic circles. At the same time, spa towns and resorts started to provide meeting areas in their larger public spaces. With the development of the railway network, hotels were constructed along with major Natalie Schütter 14

stations which had large spaces available to rent (Rogers, 2003, p. 3). In the early 20 th century, a major development took place in the USA, where the concept of conference and convention rose. Trade and scientific associations, together with the political parties, began to organize large-scale gatherings (Swarbrooke & Horner, 2001, p. 17). Soon cities recognized the great economic impacts when hosting such events which lead to the establishment of convention bureaus to promote cities as convention destinations (Swarbrooke & Horner, 2001, p. 17). There is no doubt that the origins of today s meeting industry lie in the political and religious congresses of earlier centuries, followed by business meetings and, in the USA, trade and professional association conventions. (Rogers, 2003, p. 4) However, the growth and acknowledgement of a proper industry is a much more recent phenomenon, in Europe especially, effectively dating from the mid to the late 20 th century. The real formation of the industry, however, can be marked by the founding of trade associations such as the International Association of Exhibition Management (IAEM) in 1928, the Professional Convention Management Association (PCMA) in 1957, the International Congress and Convention Association (ICCA) in 1963, the International Association of Professional Congress Organizers (IAPCO) in 1968, or Meeting Professionals International (MPI) in 1972, just to name a few (Rogers, 2003, p. 4). Since the 1960s, a sound increase of investment in infrastructure that supports conferences, meetings and related events resulted in a swift expansion during the 1990s. Major investments have been made not only throughout Europe, Australasia and North America, but much has also been done in the former East European countries such as the Czech Republic or Hungry, in the Middle East, and even in some African countries, especially in South Africa (Rogers, 2003, pp. 5-6). Rogers (2003, p. 7) suggests that the conference and business tourism claims to be the world s largest industry. Conference tourism is now a truly global industry. 2.2.3. Structure of the Meeting Industry Davidson and Cope (2003), Rogers (2003), Swarbrooke and Horne (2001) as well as many other authors describe the meeting industry as being highly complex in its structure. Just as in most other industries, there are buyers, suppliers, and intermediaries which are described in detail in this chapter. Natalie Schütter 15

2.2.1.1. Buyers In the meeting industry one differentiates between corporate, association, public sector and entrepreneurial buyers. a) Corporate The term corporate is used to describe conference organizers, often referred to as meeting planners working for corporate organizations. Those organizations are mainly established to generate a profit and thus provide a financial return for their owners [...]. They can be manufacturing or service companies and can be found in various industry sectors such as oil, gas and petrochemicals; medical and pharmaceuticals; computing/it and telecommunications; motor manufacturing and other manufacturing; financial and professional services; food, drink and tobacco; travel and transport. (Rogers, 2003, p. 28) Some companies have their own event management departments that are dedicated to organizing various events. Due to cost cuttings, those departments sometimes get closed down and the former employees of this department work on a contract basis. They then work as freelancers and therefore are not considered a company overhead. However, on many occasions, corporate events are organized by departments such as sales and marketing, human resources or central administration. The decision-making bodies are usually the corporate conference organizers, line managers, the managing director or by a group of people with consulting functions. The decision-making process itself is fairly simple and instantaneous (Rogers, 2003, pp. 29-30). There are many different types and sizes of corporate events and the most familiar ones are for example annual general meetings, board meetings, incentive travel or road shows, product launches, sales conferences, training seminars, technical conferences or team- building events (Rogers, 2003, p. 30). However, a distinction between internal and external meetings can be made (ICCA, 2009, p. 12). Participants of internal events are the company s employees whereas external events participants are customers. External events are used as a tool to enhance the Customer Relationship Management (CRM) strategies whereby companies try to build a long-term relationship with their key clients. One way of doing this is to invite clients to be part of the company s development process through attending events. Those events are usually new product launches, educational meetings explaining complex new products (Rogers, 2003, p. 30). Natalie Schütter 16

Typical for corporate events is the rather short lead time in comparison to association events. Corporate events usually have to be planned and staged within several weeks or a few months. Their peak seasons are spring and autumn; July and August are the low season months (in the northern hemisphere). The budget of corporate events is expressed in terms of expenditure per delegate, [and] is generally much higher than that for many association conferences, as it is the company that pays for delegate attendance, not the delegates themselves. (Rogers, 2003, p. 31) Selecting an attractive venue coupled with a professionally produced conference will reinforce the importance of the event in delegates minds and contribute to the successful achievement of its objectives for motivational, informative or team building purposes (Rogers, 2003, p. 31). b) Association Association events are often among the largest and longest conferences held worldwide. The organizational buyers for such events include professional or trade associations (members share the same employment or profession), voluntary associations and societies (members share the same interest or hobby), charity associations, religious organizations, political parties or trade unions. They are frequently referred to as SMERF groups, which are organizations that are not work-related and operate in the social, military, educational, religious or fraternal area. These conferences are repeatedly represented in the public media, in a way that corporate events are not and therefore need to be handled extremely professionally when it comes to press and media exposure (Davidson & Rogers, 2006, pp. 6-7; Rogers, 2003, p. 33). Being an association usually means that the organisations are not-for-profit and only few generate a financial return. However, their conferences also need to cover costs and sometimes even need to generate a profit. Profit will enable the association to reinvest in administrative and promotional costs for any future events and conferences (Rogers, 2003, p. 33). Davidson and Rogers (2006, p. 6) mention that there is a major difference between the corporate market and the association market. For a corporate buyer, conferences and meetings are a cost to the company, for associations, conferences normally represent a source of funds. Companies do not charge their delegates to attend their events, whereas associations depend on the income [...] to pay for many of the ongoing costs of running the association (Rogers, 2003, p. 33). The not-for-profit associations purpose is mainly to provide a service to members and to the community. The Natalie Schütter 17

trade and professional associations function is to help their members maintain the professionalism of the business or industry to which they belong. (Davidson & Rogers, 2006, p. 6) Meetings are typically held for different reasons on a regular basis, but frequently for the purpose of training and information exchange. Associations annual conferences offer their members the opportunity to meet for one or more days in order to discuss matters of importance to their profession or their common cause. (Davidson & Rogers, 2006, p. 6) One has to bear in mind that participants of an association event have different characteristics than corporate delegates. As mentioned, association delegates choose to attend events rather than being asked to by their employer. They often have to pay for all their expenses themselves, which means costs need to be kept as low as possible to attract people to attend. Regarding participation numbers, association events have a higher participation rate than corporate events and often have high media attention (Rogers, 2003, p. 34). Regarding the decision-making process for association events, it is rather different than in the corporate sector. Especially in regards to larger association, who very often have dedicated conference organizers and, in some cases, event organizing units/departments. The decisions are made by the committee elected by the members, but the conference organizer will be the one who will do all the research first including creating a list with all destinations and venues that seem likeable and the committee will then choose from this list and make recommendations (Rogers, 2003, p. 35). Since there are many different associations in regards to their size, type and geographical location (local, regional, national or international), the location very often is determined by a host committee such as a local chapter of an association who will have a great influence on the site selection (Davidson & Rogers, 2006, p. 6; Rogers 2003, p. 35). Rogers (2003, p. 35) states that internal politics can also have a major influence within such organizations, e.g. the President or Chairman s wife wants to meet in Florida! Another difference between the corporate and the association sector is the lead time. Many association events have a high number of participants, which already makes it difficult for some destinations that do not have enough space available to host a big event. This is one of the reasons that it is quite common for associations to book their venues well in advance due to the limited choice and the difficulty to organize a conference with 1000 delegates. Therefore, lead times tend to be much longer than in the corporate sector (Rogers, 2003, p. 35; ICCA, 2009, p. 12). Natalie Schütter 18

Important to understand, especially for those destinations and venues who can stage such big events, is that many association events tend to rotate regarding the location of their conferences. This can occur on every level, but it is very common for national and international associations. It is essential to recognize the patterns of a particular association in order to bid for the most potential events for a destination. Furthermore, peak seasons for association conferences are autumn and spring, but some conferences take place over the summer months and a limited number during winter. (Rogers, 2003, pp. 36-40) c) Governmental and Public sector The public or governmental sector is very similar to the association sector and frequently included in the association sector. For example ICCA (2009, p. 12) distinguishes the association sector between International Governmental Organisations and International Non-Governmental Organisations (associations). Davidson and Rogers (2006, pp. 6-7) suggest that governmental buyers include organisations at all levels, from local municipalities to the international, intergovernmental scale, as well as public sector bodies such as those administering national health services. It is quite common that at the international level an extensive media attention can be recognized due to their high profile status such as the European Union s Intergovernmental Conferences. d) Entrepreneurial Rogers (2003, p. 43) has identified a fourth type of buyer, who is quite important for the meeting industry. An entrepreneurial buyer is someone who identifies hot topics in the business or academic world, and then plans and produces a conference at which the topic can be presented, discussed and debated by highprofile speakers and experts. 2.2.1.2. Suppliers There are many different kinds of organisations that supply the meeting industry with facilities and services. Those include venues, destinations and many other service providers. a) Venues It can be said that there is a constant change in creating new venues and updating old venues to make them suitable for the meeting industry. Basically any type of building could be promoted as a conference venue. (Rogers, 2008, p. 56) Natalie Schütter 19

Rogers (2008, p. 56) claims that hotels comprise over half of all [..] [meeting] venues, being particularly important to the corporate market sector. Those are usually city center hotels, hotels close to an airport, a highway, or a motorway as well as hotels located in the countryside. Hotels close to a convention center benefit a lot from the meeting industry as accommodation providers for the delegates. Association conferences can be very beneficial for hotels as they sometimes choose a hotel as their head office hotel which can lead to great media coverage for the hotel. Apart from hotels, there are four additional types of venues. These include purpose-built centers that are explicitly built for the meeting industry, which can be designed for large events with thousands of delegates or smaller events. Also, colleges, universities and other academic venues are often used during vacation periods for all kinds of meetings and events. Additionally, civic venues for instance include for instance council chambers and committee rooms or town halls which can serve as a meeting venue. The last type can be referred to as unusual or unique venues, which include a broad range of venues and cannot be classified as one of the previously mentioned types. Unusual venues are often very attractive since they add a certain charm to the event which can make the event more memorable. Many venues in this category have high quality facilities to offer, however, for those who are limited with their facilities; they can compensate their shortcomings with the attractiveness of their venue. Sporting, cultural and entertainment, tourist attractions or transport venues as well as venues like lighthouses count to this category and very often have a competitive advantage due to their uniqueness (Rogers, 2008, pp. 57-58). b) Destination Selecting a site for any type of event within the meeting industry is of great importance to the organizers. The location plays a major role in the decisionmaking process regarding where to stage an event. When referring to a destination, this can mean a town, a city, a region or a country. Every destination must contain a range of venues, facilities, attractions, support services and appropriate infrastructure to help, create a center of attention for the meeting industry. Destination marketing organizations (DMOs) and convention and visitor bureaus (CVBs) have to fulfill their tasks of promoting a destination for meetings, highlighting all its strengths and facilities, generating and converting enquires into Natalie Schütter 20

confirmed business and help identifying [and eliminating] weaknesses in venues and facilities and in general infrastructure (Rogers, 2008, p. 59). c) Other There are many different suppliers involved in the meeting industry who are essential for staging events. Rogers (2008, p. 60) has identified examples of key suppliers which include audio-visual and telecommunications companies, transport operators, interpreters and translators, speakers, entertainers, corporate events companies, speciality caterers, floral contractors, exhibition/exposition contractors, companies which develop specialist computer software and so forth. 2.2.1.3. Agencies and Intermediaries Meetings or similar events can either be organized and run by employees of the buying organization, or by intermediaries or agencies hired by an organization to plan and run their events on behalf of them (Davidson & Cope, 2003, p. 113). Rogers (2008, pp. 60-74) as well as Davidson and Cope (2003, pp. 113-212) have identified a vast range of agencies and intermediary organizations, both on the supplier and buyer side, acting as the buyer on behalf of their clients. These include Professional Conference Organizers, venue finding agencies, conference production companies, incentive travel houses, destination management companies, corporate events companies, and exhibition organizers. a) Professional Conference Organizer A professional conference organizer or PCO is an event management firm that assists companies organize and run their meetings and events. Tasks include researching and recommending a suitable venue, helping to plan the conference programme [...], marketing the conference and handling delegate registrations, booking accommodation [...], handling all of the conference finances, and so forth (Rogers, 2008, p. 61). b) Venue Finding Agency Rogers (2008, p. 66) and Davidson and Cope (2003, p. 115) agree that venue finding agencies are limited in the services they can offer which usually are finding and proposing an appropriate venue for their clients. Such agencies put together a shortlist of venues that are suitable for their client s needs and requests in terms of size, location, date and costs. When a client has made a final decision in choosing Natalie Schütter 21

a proposed venue, the agency will receive a commission from the venue. Therefore, services to their clients can be offered free of charge. c) Conference Production Company Conference production companies are companies providing support in designing and building conference sets and backdrops as well as audiovisual and special effects. These companies are often used for high profile and complex events such as product launches, which require superior technical equipment and know-how. It is common that these companies partner with PCOs or other meeting planners in order to add their expertise to the event (Davidson & Cope, 2003, p. 116). d) Incentive Travel House Incentive travel is often used by companies to motivate and reward their employees, distributors, and retailers. Incentive travel houses provide research, consulting, and organizing services to clients. They create incentive programmes that help companies reach their goals and motivate their employees. This also includes services like helping identifying objectives of the programme and the creation and management of incentive programmes (Rogers, 2008, pp. 69-70). e) Destination Management Company Destination management companies or DMCs are the so called the ground handlers of a destination, be it a city, a region or even a country. They are based at the destination where the event is held. They have a detailed and vast knowhow of the destination, the local suppliers, language and customs, and often partner with PCOs, incentive travel houses or meeting planners to organise an event (Davidson & Cope, 2003, p. 116). Services of a DMC include proposing venues, organizing accommodation for the delegates, arrange transportation requirements, putting together itineraries and social programmes, and anything else the client may demand. This is why it is sometimes difficult to clearly distinguish between DMCs, PCOs and other similar organizations that provide similar services (Rogers, 2008, p. 71). f) Corporate Event Company Many organizations use corporate hospitality or entertainment, such as sporting and cultural events, to build up relationships with their clients or potential clients. Corporate event companies are hired to organize such events and even create whole programmes. They also put together packages around certain sporting or Natalie Schütter 22

cultural events for companies who are seeking to provide their clients with an exceptional experience at these events. Other services include team building activities put together for companies who want to strengthen the relationships to their clients and/ or employees (Rogers, 2008, p. 72). g) Exhibition Organizer Many exhibitions have conference programmes in addition to the exhibition while larger conferences have exhibitions additionally to their programme. Some conference organizers carry out the organization of the exhibition themselves, while others choose to hire exhibition organizer companies who are specialists in this field (Rogers, 2008, p. 73). 2.2.1.4. Destination Marketing Organizations Marketing activities are important to be carried out for any kind of product to be sold. Destinations also have to actively participate in marketing activities in order to attract business to their destination. This can take place on a local level, such as city, county or region by convention and visitor bureaus, conference offices and conference desks, or on a national level by the national tourist office or a national convention bureau (Rogers 2008, p. 135). A convention and visitor bureau or CVB is a nonprofit umbrella organization that represents a city or urban area in the solicitation, servicing and marketing of the city to all types of travelers to that city or area. (Polivka, 1996, p. 214) In general, CVBs are funded by room taxes, governmental support, private membership, sponsorship, and cooperative trade activities with their members (Polivka, 1996, p. 214; Rogers, 2008, 136). They usually operate as an independent organization, as a department of the chamber of commerce, or as a department within the city government. Their tasks include bringing together the city government s interests, trade and civic associations, and individual travel/hospitality suppliers [...] in building outside convention and visitor traffic to the area. (Polivka, 1996, p. 214) They are responsible for promoting the city, region, or area to attract meetings and events. Notably, they do not actually act as organizers; they only help meeting planners to learn more about the destination, its attractions and everything that the destination has to offer in services and facilities (Polivka, 1996, pp. 214-215). They are the neutral starting point for anyone who wants to organize a meeting or a congress in a specific destination [...] [and are] a one-stop-shop for independent Natalie Schütter 23

information and assistance and will give a planner unbiased and neutral advice. (ICCA, 2008, p. 4) National tourist organizations are mainly responsible for promoting their countries to the leisure market but try to attract the business tourism market as well (Davidson & Cope, 2003, p. 117). Many countries also have national convention bureaus that are fully public sector organizations and are funded and managed by the central government (Rogers, 2008, pp. 140-141). 2.3. Rankings Every research conducted provides certain parameters for measurement purposes to evaluate an industry s performance. The meeting industry is rather young and rapidly growing and therefore still lacking in providing trustworthy data and research that can provide information on the industry s development, dimensions, and importance. However, there are two well recognized associations that produce statistical data on an annual basis, namely the International Congress and Convention Association (ICCA) and the Union of International Association (UIA) (Davidson & Rogers, 2006, pp. 219-220). Their research programmes essential task is to monitor the staging of international congresses and meetings, identifying trends and producing annual rankings of the most successful cities and countries. (Davidson & Rogers, 2006, p. 221) The information they provide is beneficial for competing destinations to see which destinations are maintaining or increasing their market share, and which may be losing their position in the international meetings market. (Davidson & Rogers, 2006, p. 221) Those rankings can also have a valuable effect on destinations with a high ranking in terms of marketing and promotional activities (Davidson & Rogers, 2006, p. 221). The International Congress and Convention Association or ICCA was founded in 1963 and currently has 850 members within 85 countries (ICCA, 2009, p. 5). ICCA gathers information on international association meetings such as information on their location and other characteristics. Criteria for association meetings to be included in the database are a minimum participation of 50 delegates, the meeting should be organized regularly, and the location where it is held should alternate between at least three different countries (ICCA, 2009, p. 12). The Union of International Associations or UIA, founded in 1907, also undertakes studies on international meetings and collects statistical data according to various criteria. Only meetings that are organized and/or sponsored by the international Natalie Schütter 24

organizations [...] [such as NGOs or IGOs] which appear in the UIA s Yearbook of International Organizations and International Congress Calendar and whose details are subject to systematic collection, on a yearly basis by the UIA are included in the research. (Rogers, 2008, pp. 13-14) These meetings have to meet the criteria of having a participation number of at least 300 delegates, a participation rate of 40% foreigners, with a minimum of 5 different nationalities attending and are to be held for at least three days (Rogers, 2008, p. 14). Natalie Schütter 25

3 THE MEETING INDUSTRY IN VIENNA 3.1. Historical Background As previously mentioned, the Congress of Vienna is said to be the historic launch event for the meeting industry (Rogers, 2008, p. 3). This event was essential for Vienna s meeting industry, but more high profile events that mark the city s meeting industry followed, especially after World War II when Vienna s meeting industry started to develop rapidly. A major political event for Vienna, and for the whole nation, took place in 1955 when the Austrian Independence Treaty was signed at the Belvedere, a high profile event that created a lot of media attention (Vienna Tourist Board, 2005, p. 38). In the same year, a Viennese tourism law made it obligatory for all organizers to provide details of their events to the Vienna Tourist Board upon request. This way, the Vienna Tourist Office not only influenced some of the dates but starting in 1958 also published a congress calendar which still exists today (Vienna Tourist Board, 2005, p.32). In 1958, the Hofburg Congress Center and the Wiener Stadthalle opened their doors while Austrian Airlines started scheduled flights at the Vienna International Airport. In 1963, the Congress Center Vienna opened and the Winter Riding School was adapted as a conference center. Due to tourism branch complaints regarding the shortage of beds, lead hotels and travel agencies joined forces and created the Congress Pool which made large contingents of hotel beds for accommodating participants of congresses available (Vienna Tourist Board, 2005, p. 32). 1961, the U.S. President John F. Kennedy and his wife Jackie met with Soviet Premier Nikita S Khrushchev and his wife in Vienna, attracting a lot of international media attention to this high profile event. Such events took place on a continuous basis since Vienna was considered as the outpost to the Eastern bloc after the establishment of the Iron Curtain. The city continuously functioned as the turntable between east and west, especially until the opening of the east in 1989. Vienna has become a hub for staging summits on the highest level such as the meeting in 1979 between the U.S. President Jimmy Carter and the head of the USSR Leonid Brezhnev (Vienna Tourist Board, 2005, p. 8). In 1969, the Congress Center Hofburg became privatized and in the same year, the city and the chamber of commerce decided to provide funds for the promotion and advertisement of Natalie Schütter 26

congresses resulting in the creation of the Congress Bureau of the Vienna Tourist Office and a board of directors now known as the Vienna Convention Bureau. In 1972, the Vienna Tourist Board created a database of congress organizers electronically recoding all international organizers and sales incentive organizers. One year later, Vienna was voted Congress City of the Year by the International Congress Bureau in Paris (Vienna Tourist Board, 2005, p. 32). Essential for Vienna s meeting industry was the opening of the Austria Center in 1987, funded by the Republic of Austria. The construction of the center was not well perceived by many people and even a referendum found its support with 1.3 million signatures. However, in the end the Austria Center was built and today, the conference center is very important for the city s meeting industry (Vienna Tourist Board, 2005, p. 33). Since 1989, ICCA as well as UIA placed Vienna among the top ranks and in 1993 Vienna ranked number one for the first time in the ICCA statistics, ahead of Madrid and Paris. In 1997, the European Radiology Congress took place in Vienna with 60,000 overnight stays. One year later the city hosted the Cardiology Congress with 23,000 participants (Vienna Tourist Board, 2005, p. 33). The Trade Fair Center Vienna opened in 2004, adding another value to the city s meeting industry. In the same year, the Vienna Convention Bureau represented Vienna as a meeting destination at 36 trade fairs and catered to 240 congress and incentive decision makers from 11 countries at their site inspection in Vienna (Vienna Tourist Board, 2005, p. 33). 3.2. Vienna Meeting Industry Statistics Vienna has undergone a great development and has been ranked under the top 10 meeting industry destinations by UIA and ICCA a number of times in previous years. These rankings can be seen as an indication of how successful Vienna s meeting industry is on a global basis. The Vienna Convention Bureau is also very much involved in data collection and therefore releases a report every year with Vienna s meeting statistics of the previous year as well as the developments since 1999 presented. This report gives essential insight into Vienna s meeting industry s dimension and its economic value as well as indications of the importance of the meeting industry for the city. Natalie Schütter 27

An interesting graph was created by the Vienna Convention Bureau showing the city s international rankings by ICCA and UIA between 1998 and 2007 as indicated in Figure 2. Figure 2 Vienna s international ranking Source: Vienna Tourist Board, 2008a, p. 41 2008 was a very special year for Vienna as the city hosted the European Football Championship. However, due to this mega event, less international congresses were recorded than the year before. International congresses tend to avoid destinations hosting mega events and it was therefore no surprise that fewer international congresses were staged. Despite this fact, 2008 was still the second best congress year the city has ever had (Vienna Tourist Board, 2008a, p.38). With a total of 3,257 congresses and corporate events, a total of 369,894 participants and a total of 1,261,494 overnight stays, 2008 showed an increase of 18% in the total number of events. However, total overnights decreased by 11% which was the result of the short-term loss in international congresses in June 2008 as well as the trend of shorter events with less participants on average (Vienna Convention Bureau, 2008a, p. 10). Natalie Schütter 28

Figure 3 shows the 2008 numbers of national and international congresses held in Vienna as well as corporate events and their increase or decrease of the previous year. It also indicates the overnights stays generated by congresses and corporate events. Figure 3 Congresses and Corporate Events 2008 Source: Vienna Tourist Board, 2008a, p. 38 When comparing congresses and corporate events, the meeting statistics report of the Vienna Convention Bureau also reveals that the contribution of the market share of the total overnight stays in Vienna has increased from 9.37% to 12.33% between 1999 and 2008. This is quite a remarkable amount which is very beneficial for Vienna s hotel industry (Vienna Convention Bureau, 2008a, pp. 5-9). Figure 4, produced by the Vienna Convention Bureau, shows the percentage of the international congresses subjects. The figures of 2008 show a great number of congresses dealt with human medicine as well as economics and politics (Vienna Convention Bureau, 2008a, p. 38). Natalie Schütter 29

Figure 4 International congresses detailed analysis by subjects Source: Vienna Convention Bureau, 2008a, p. 38 3.3. Vienna s Offer to the Meeting Industry The Vienna Convention Bureau (2007, p. 5) claims that Vienna is one of the world s foremost international conference cities, boasting three convention centers, 131 event locations, and over [..] [400] hotels, all of which are interconnected by an excellent public transport network. 3.3.1. Accessibility Vienna is accessible via two airports, the Vienna International Airport and the M.R. Stefanik Airport in Bratislava. The Vienna Airport is located 16 km east of the city with 65 airlines that fly to and from 40 destinations in East Europe and 130 in West Europe and overseas. Vienna and Bratislava are about 60 km apart and therefore are the two closest located capital cities in the world. There are many bus and train connections between those two capitals, offering one of a kind accessibility (Austria Convention Bureau, n.d.a, para.5). Furthermore, the city has its own City Airport Train (CAT) connecting the Vienna International Airport with Vienna s city center in only 16 minutes every 30 minutes on a daily basis. A great feature of the CAT is that passengers can already check in their luggage at the City Air Terminal in the city center (Vienna Convention Bureau, 2007, p. 18). Vienna s public transport network is one of the most modern and efficient in the world [with] 5 underground lines, 33 tram routes [and] 104 bus routes (including 23 night services). (Vienna Convention Bureau, 2007, p. 19) Natalie Schütter 30

3.3.2. Venues Vienna s offers regarding venues for hosting events are quite remarkable. There are a wide range of unique locations to choose from for all types of events. With three convention centers, various academic venues, palais, museums, hotels and unusual venues, Vienna s meeting industry is diverse in its offer. In 2008, the Vienna Convention Bureau recorded 470 international congresses taking place in various venues throughout the city, of which 47 were held in the three conference centers. Figure 5 gives a statistical overview of how many international congresses were held in hotels, in congress centers, at universities and in palais, as well as the fluctuation of the quantities held in those venues between 1999 and 2008 (Vienna Convention Bureau, 2008a, p. 34). Figure 5 International congresses detailed analysis by venues Source: Vienna Convention Bureau, 2008a, p. 34 3.3.2.1. Convention Centers Vienna has three major convention centers including the Austria Center Vienna, the Hofburg Congress Center Vienna, and the Reed Exhibitions Messe Wien Congress Center. The Austria Center Vienna was the city s first convention center. The Hofburg Congress Center is rich in character due to its history of being a small part of the former Imperial Palace. The Reed Messe Wien Exhibition and Congress Center is Vienna s newest addition that opened in 2004 (Anonymous, 2009, p. 5). Natalie Schütter 31